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Emerging Markets Are on a Tear

  • Central bank tightening sends signal global growth rising
  • Stocks in developing world in longest rally since August
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Emerging Market Stocks Extend Winning Streak

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The strength of a rally across developing nations after the Federal Reserve’s rate increase has become a riddle for global investors. But the answer may be simple: growth prospects.

While higher U.S. borrowing costs typically boost the dollar, policy makers were less hawkish than investors expected, sending the greenback tumbling and emerging-market assets soaring. That gave investors breathing space to revel in the prospect of faster U.S. growth -- because when the world’s largest market takes off, it lifts the fortunes of countries worldwide.